Lecture 6 - Brand Growth Flashcards
What are the 2 main ways to grow a brand?
Mental Availability - create a compelling expiation & brand salience that increase the likelihood of your brand to be taken into consideration during the decision making process
Physical Availability - match consumer expectations of where the brand is available to buy & influence how they purchase
What are the key factors within short term brand building?
Sales Activation
- generate new sales
- persuasive messages
- product focus
- exploit brand equity
- targeted marketing
What are the key factors within long term brand building?
- influence future sales
- emotional priming
- brand focus
- create brand equity
- mass marketing
What are the key stages within the brand lifecycle (Lehu, 2008)?
Birth > Growth > Maturity > Decline > Death
What are different causes of brand decline/ challenges?
- quality aspect
- changing consumer trends
- impact of technology (advances)
- growing number of private labels/ retailer own labels
- brands becoming generic
- lack of effective & consistent communication
- keeping the brand young & relevant
How do firms grow (Ansoff matrix)?
- market penetration
- market development
- product development
- diversification
market penetration
focus on current products/ markers
market development
entering new market with existing product
product development
entering existing market with new product
diversification
entering new market with new product
What are the key 4 options for brand growth?
- licensing
- brand extensions
- brand rejuvenation
- brand alliances
What is brand licensing?
The brand owner (the licensor) grants another firm (the licensee) the right to use the brand.
- this helps generate additional renew & protects the brand from miappropriation
- extend the brand without cost of direct entry
- potential for brand dilution & 2 sided moral hazard
What are brand extensions?
Brand extensions involve the application of an established brand name to new products in order to capitalise on the equity of the original brand name & capture new market segments (Karin et al, 1996)
Reasons for brand extension
- brands posses competitive advantage
- dominant form in new product introduction
- used as a strategic device
- helps extend market share quickly as parent brand is already established & trusted
- assists in increasing customer acceptance to enhance the prospect of new product introductions success
Horizontal (category) Brand Extension
same product new market category
Vertical (line) Brand Extension
same product same category
the risk of brand stretching
brands who stretch too far risk diluting the core associations and eroding the consumer base (Farquhar et al, 2013)
The importance of fit
consumers are more likely to experiment/ purchase a new product if their is a certain degree of compatibility between the brand and the new category (Lahiti & Gupta, 2005)
- perceived fit is heavily discussed within literature & emphasises that consumer attitude towards the brand an category has an influence over behaviours including: intentions, choices and purchases.
Why is there growth of Brand Alliances?
Brands are valuable assets & can be combined to form an alliance where has a greater impact that what the brands had operating independently
What is a brand alliance?
defined as a long or short term combination of 2 or more partner brands that undertake combined corporate activities (Schnittka et al., 2017)
What are the 3 types of brand alliances?
- co-branding
- brand licenses
- cross marketing
Co Branding
partner brands offer a jointly branded product, the most widely used form
Brand Licences
a contractual agreement where a brand lets another organisation use its brand on products
Cross Marketing
an agreement for mutual promotion between 2 companies
Motivations for engaging in brand alliances
- easier for a brand to enter a unfamiliar international market through cooperation with a well established local brand
- sharing research and development costs, lowering the financial risks associated with a new product launch
- reduce high failure rate of new products due to existing customer perceptions of the established partner brand
- low equity brands benefit from association with high equity brands
choosing the right brand ally
- existing brand equity
- levels of brand familiarity
- consumer brand association/ perceived quality
- understanding the ally’s brand personality
- extent to which the parter brand ‘fits’ with the brand ally
Importance of choosing the right brand ally
- choosing the wrong secondary brand as a partner may cause negative spillover effects
disadvantages of brand ally
- the partner brand may gain more than the other
- if an ally goes ‘rogue’ it can have an impact on the partnership bond/ guilt through association
- repetitional risk
- financial risk
Brand Acquisition
Refers to the process where a company purchases or acquires the right to another companies brand
What are key example of brand acquisition?
- Mini & Bmw
- Mars & Hotel Chocolat
Why do companies engage in acquisitions?
- market expansion & growth
- reduce competition
- portfolio diversification
- competitive advantage
- talent acquisition
- exit strategy
